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Rogers Communications Inc. (RCI) took a step Tuesday clearly aimed at enhancing shareholder value, and UBS Securities analyst Jeffrey Fan is very supportive.

Toronto-based Rogers announced a plan to grow its current share buyback program to as much as $1.5-billion or 10% of the outstanding shares (whichever is cheaper). It also set a target leverage range of net debt to adjusted operating profit of 2.0 to 2.5 times.

Mr. Fan wrote in a note that the buyback could be "very accretive" to earnings per share.

"With a slower growth profile, we believe this is a shareholder-friendly move to enhance equity returns. We also believe this move reflects [the] Rogers family and management's efforts to create value for all shareholders," he wrote.

He believes that the company can continue to buy back $1-billion to $1.5-billion of its shares for several years, increase its dividend and stay well within its target leverage ratio and dividend payout range.

Mr. Fan has a "buy" rating on the stock and a target price of C$37.00 a share.

Source: Rogers Makes Smart Move with Buyback